Foreign investors await an indication from Investment Canada as to what the (foreign investment) guidelines are all about, says Ron Deyholos in Financial Post

Clarity Sought on Foreign Takeover Rules

The Conservative federal government’s decision to signal that it will block the Petronas bid for Progress Energy Resources Corp. caught a lot of lawyers by surprise. It’s certainly changed the way Calgary oil and gas lawyers explain the Canadian foreign investment review process to potential investors from overseas.

Until last weekend, it was easy to respond to any foreign clients who expressed concerns over the problems BHP Billiton Ltd. encountered in its bid for Potash Corp. of Saskatchewan. Lawyers used to dismiss BHP’s case as something of an anomaly, explains Ron Deyholos, an energy lawyer with Torys in Calgary. The Petronas situation has made it harder to say that to potential foreign investors, he adds.

"I think it will be more difficult to put foreign clients at ease until there’s more of an indication from Investment Canada as to what the guidelines are all about," Ron says.